Cement dispatches surge 22.77% during August

LAHORE: The cement sector posted 22.77 per cent growth in August 2021, compared with the same month of the last year.

Total cement dispatches last month remained 4.336 million tonnes as against 3.531 million tonnes during August 2020.

As per the data released by the All Pakistan Cement Manufacturers Association (APCMA) on Friday, local cement dispatches during August 2021 increased to 3.814 million tonnes, compared with 2.805 million tonnes in August 2020, showing a significant increase of 35.98 per cent.

The exports; however, continued to decline, as the volume reduced to 521,468 tonnes in August 2021 from 726,687 tonnes in August 2020, a decline of 28.24 per cent.

During the period under review, the North-based mills dispatched 3.141 million tonnes of cement in the domestic market, showing an increase of 25.42 per cent over 2.504 million tonnes dispatched in August 2020.

The South-based mills dispatched 673,572 tonnes cement in the local market, registering an increase of almost 124 per cent, compared with the dispatches of 300,750 tonnes in August 2020.

The exports from North-based mills decreased 33.14 per cent, as the quantities reduced to 141,804 tonnes in August 2021, compared with 212,076 tonnes in August 2020.

The exports from South also decreased 26.22 per cent to 379,664 tonnes in August 2021 as against 514,611 tonnes during the same month last year.

During the first two months of the current fiscal year, the total cement dispatches (domestic and exports) stood at 8.235 million tonnes, 1.61 per cent lower than 8.37 million tonnes dispatched during the corresponding period of the last fiscal year.

The North-based mills dispatched 6.033 million tonnes of cement domestically during the first two months of the current fiscal year, showing a slight increase of 1.57 per cent than cement dispatches of 5.939 million tonnes during July-August 2020.

The exports from North declined 17.16 per cent to 277,422 tonnes during July-August 2021, compared with 334,899 tonnes exported during the same period of the last year.

The domestic dispatches by South-based mills during July-August 2021 stood at 1.228 million tonnes, showing a healthy increase of 50.01 per cent over 818,600 tonnes cement dispatched during the same period of the last fiscal year.

There was a massive decline of around 45 per cent in exports from the South Zone, as the volumes reduced to 696,823 tonnes in the first two months of the current fiscal year from over 1.277 million tonnes during the corresponding period of the last fiscal year.

A spokesman for the All Pakistan Cement Manufacturers Association said that the increase in domestic dispatches showed that the economic activity has picked up, which would help achieve higher GDP growth.

The landed price of coal has increased multiple times since August 2018, enhancing the cost of production by Rs90/bag, he said, adding that similarly, electricity tariff, which was Rs11.68/unit in August 2018 is now Rs19.40/unit.

This has impacted the cost of production by around Rs35/bag. Other input costs such as packing material, provincial taxes on raw material and fuel prices have also gone up, which has increased the overall cost of production, the spokesman said.

He said the current demand of imported coal for the cement sector is around 8.120 million tonnes but there is only one terminal in the country to handle the entire coal shipments. Owing to this, the cement industry is continuously facing delays in unloading of coal shipments, resultantly paying demurrages and incurring additional costs on its operations.

The situation will further aggravate within the next two years, when the cement production capacity of the country will increase from 70 million tonnes to around 100 million tonnes/annum, he said.

Accordingly, the demand for coal will increase and coupled with the requirement of other sectors such as textiles and power, handling by just one terminal will not be possible.

He urged the government to ensure availability of multiple berths for coal handling.